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St Antonys
International
Review

The International
Politics of Oil
Vol. 2, No. 1, May 2006

Simon Bromley Joshua Busby


Nils Duquet Leben Nelson Moro
Peter Utting & Kate Ives

St Antonys
International
Review

Editors Alexander Betts, Matthew Eagleton-Pierce


Guest Editor Anne Roemer-Mahler
Managing Director Emily Paddon
Associate Editors Joanna Gorska, Roderick Kefferputz, Taylor Owen
Book Reviews Editor Michael Tatham
Secretary Roham Alvandi
Treasurer Megan Bradley
Copy Editor Hayley Holness
Art Director Jure Stojan
Editorial Committee Jaffar Al-Rikabi, Line Chertas, Anna Hakala, Hilary
Kalmbach, Gerwin Klaus, Nadiya Kravets, Natalia Morozova, Shachar Nativ,
Yuliana Palagnyuk, Naysan Rafati, Thomas Robbins, Noa Schonmann, Nahid
Siamdoust, Alisa Voznaya, Kate Wagner
Special thanks to Polly Friedhoff, Sir Marrack Goulding, Sarmad Khan from the
United Nations Development Program (undp) Yemen, Fareed Mohamedi, pfc
Energy, the Department of Politics and International Relations at the University of
Oxford, and St Antonys College Junior Common Room
Advisory Board Professor Archie Brown, Dr Patricia Daley, Professor Rosemary
Foot, Professor Timothy Garton Ash, Sir Marrack Goulding, Dr David Johnson,
Professor Margaret MacMillan, Dr Hartmut Mayer, Dr Alex Pravda, Professor Avi
Shlaim, Dr Steve Tsang, Professor William Wallace
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St Antonys International Review (2006). All rights reserved.

St Antonys International Review


The International Politics of Oil
Volume 2, Number 1, May 2006
Notes on Contributors 

Editorial Introduction: The International Politics of Oil 



Alexander Betts, Matthew Eagleton-Pierce and

Anne Roemer-Mahler

The Politics of Corporate Social Responsibility and the Oil Industry 11



Peter Utting and Kate Ives
Climate Change and Collective Action: Troubles in the Transition 
to a Post-Oil Economy

Joshua Busby

35

The United States, Hegemonic Strategies and World Oil 



Simon Bromley

56

The Oil-Foreign Policy Nexus: A Response to Simon Bromley 



Steffen Hertog

71

Oil, War and Forced Migration in Sudan



Leben Nelson Moro

75

Oil, War and Forced Migration in Sudan: A Response



Richard Barltrop

91

Angolas Rise to Regional Power: 


A Theoretical Approach to Oil and Conflict in Central-Africa

Nils Duquet

96

Oil in Geopolitics 
An Interview with Fareed Mohamedi 

113

Book Reviews 

120

Notes on Contributors
Richard Barltrop is a DPhil candidate in international relations at the
University of Oxford.
Simon Bromley is Senior Lecturer at the Open University.
Joshua Busby is a Fellow at the Center for Globalization and Governance,
Princeton University.
Nils Duquet is a researcher at Onderzoeksgroep tor, at Vrije Universiteit
Brussel (vub).
Steffen Hertog is a DPhil candidate in international relations at the
University of Oxford.
Kate Ives is Research Assistant for the United Nations Research Institute
for Social Development (unrisd).
Fareed Mohamedi is Partner and Head of the Country Strategies Group
at pfc Energy.
Leben Nelson Moro is a DPhil candidate in development studies at the
University of Oxford.
Peter Utting is Deputy Director of the United Nations Research Institute
for Social Development (unrisd).

Editorial Introduction:
The International Politics of Oil
Alexander Betts, Matthew Eagleton-Pierce and
Anne Roemer-Mahler
The contemporary global economy is premised upon energy consumption.
Industry and transportation lie at the heart of economic development,
and both have come to depend upon sustainable access to hydrocarbons.
Alongside gas and coal, oil is particularly significant as a source of
energy. While other fossil fuels can be used in electricity production,
there are few reliable substitutes for oil in transportation, and it continues
to be widely used in industrial production. Demand for oil was around
75 million barrels per day (bpd) in 2000, and the International Energy
Agency (iea) estimates that it may nearly double by 2030.1 There have
long been concerns about whether the current rate of consumption is
sustainable from an environmental and economic perspective. The socalled peak oil debate has deliberated over the point at which the world
would reach its highest point of oil production, claimed to represent the
half-way point of total exploitation of global reserves.2 With diminishing
supply and rising prices, ongoing oil dependency is widely recognised to
have serious economic consequences.3 Significantly, however, the implications of ongoing consumption, production, and extraction of oil go far
beyond economics; they are profoundly political.
The political consequences of dependence on oil are increasingly
evident in a range of different ways. In the context of the war on
terror, the United States (us) presence in Afghanistan and Iraq has
led to questions about the extent to which securing access to oil has
motivated these conflicts and u.s. foreign policy more broadly. Meanwhile,
increasing evidence about the potential effects of climate change has led
to growing calls to reduce dependency on fossil fuels through greater
energy efficiency and the use of renewable energy sources. This debate
on managing the global commons has likewise been deeply political,
dividing the world between supporters and detractors of the Kyoto
Protocol. Oil has also been identified alongside other natural resources
as a potential source of conflict. Although the causal relationship
remains contested, the civil conflicts in Angola, Sudan, Nigeria, and
Indonesia, for example, have been linked to competition for oil revenues.
A. Betts, M. Eagleton-Pierce & A. Roemer-Mahler, Editorial Introduction: The International Politics of Oil, stair 2, No. 1, (2006): 3-10.

Furthermore, contemporary politics is not simply about the state but is


about the broader political economy. Due to the enormous concentration
of capital in the hands of relatively few companies and the strategic
importance of energy for every government, the oil industry has often
been used to illustrate the changing relationship between the state and
business. Large private oil corporations, it is claimed, hold immense
power to influence public policy concerning, for example, trade and
investment policies, as well as the broader regulatory environment.
All of these issues highlight the diversity and complexity of the
international politics of oil. In this issue, a range of theoretical perspectives explore the influence of oil in four distinct areas: foreign policy, the
environment, development and conflict, and state-business relations.

Foreign Policy
Throughout the second half of the 20th century oil has been at the heart
of foreign policy. The Suez Crisis in 1956, the 1973 Arab oil embargo,
the consequences of the Iran-Iraq War in 1980, and the two Gulf Wars
in 1990 and 2003 most visibly illustrate how oil has been implicated in
international relations.4 Import-dependent states have been concerned
with maintaining sustainable, secure access to oil at low prices, whereas
oil exporting states, mainly in the developing world, have been
concerned with balancing the desire to uphold prices and revenues
while maintaining market share. This relationship between importing
states and Organisation of Petroleum Exporting Countries (opec) states
has been highly strategic and political. With the states that comprise
opec able to collectively bargain on price and production levels, the
politics of oil has become a strategic game with strong implications
for foreign policy.5 Numerous developing countries such as Libya and
Venezuela have used the presence of oil in their territories as a means to
assert their authority in world politics through so-called petronationalism. opecs system of quotas and collective bargaining has empowered
many of these states to leverage political capital in other areas through
their strategic significance as supply or transit routes.
Meanwhile, a number of powerful states, including the us, China,
and France, have used diplomatic relations and sometimes even military
power as a means to guarantee energy security. In particular, u.s.
foreign policy during and after the Cold War in the Middle East, parts of
Latin America and, increasingly, the Caucuses and Central Asia has been
consistently linked to the political economy of oil. Yet rarely has this

causal link been adequately substantiated to show a direct relationship


between u.s. foreign policy and the oil motive. Against the backdrop
of claims that the most recent Iraq War was motivated by oil, Simon
Bromleys article explores the way in which the oil industry has influenced
u.s. foreign policy. He argues that a hegemonic strategy to uphold
the capitalist system has driven u.s. foreign policy in the Middle East.
Significantly, though, the article places the relationship between the large
oil companies, the u.s. government and foreign policy in historical context, allowing it to demonstrate and nuance the different ways in which
the overall Middle East strategy has emerged and varied in different
parts of the region and over time. Steffen Hertogs response piece critically
examines the causal relationship between oil and the u.s. governments
Middle East policy. It explores a range of historical and geopolitical
factors that Hertog claims make the relationship between oil and u.s.
foreign policy less than straightforward. Meanwhile, in his interview
with Nahid Siamdoust, Fareed Mohamedi implicitly challenges Bromleys
central claim. Examining the motives underlying the invasion of Iraq
and u.s.-Saudi relations, he concludes that the interests of the oil industry
and concern with energy security have been peripheral to u.s. Middle
East policy making. However, looking at the relationship between foreign
policy and oil the other way around, he argues that u.s. relations with
for example Russia, Iran and Venezuela have had a significant, and often
negative, impact on the oil industry.

Development and Conflict


The politics of oil provides a fascinating case study for exploring NorthSouth relations. Although the worlds biggest producers include the us,
Russia, and Norway, the biggest exporting countries are from the developing world. The main importing countries have, until the recent emergence
of China and India as major importers, been economically developed
countries. Structurally, as the article by Nils Duquet highlights, this
relationship has placed many oil exporting states on the periphery of the
global economy. A number of developing countries are largely dependent
on oil exports. Saudi Arabia, Algeria, Sudan, Nigeria, Angola, and
Venezuela, for example, rely on oil for the majority of their export
income. Given the rankings of these states in United Nations Development
Programmes Human Development Index (hdi), the benefits of being an
oil rich developing country are somewhat ambiguous.6 Dependency on
oil export revenue has, for example, been identified as a potential curse

rather than a blessing for development.7 To illustrate this, economists


have pointed to the notion of so-called Dutch disease, whereby often a
large revenue in one sector of the economy can raise the exchange rate,
so reducing the competitiveness of other sectors of the economy and
prohibiting diversification. It has also been argued that dependency on
a single commodity is an unsustainable route to development given the
likelihood of declining terms of trade.8
However, politics rather that simple economics perhaps best explains
the resource curse argument. Indeed the precise implications of oil
for development seem to depend very much on the nature of the state.
Duquet, for example, argues that oil exporting states are often able to rely
on external income to sustain them, rather than taxation, so insulating
them from society. Without the need for accountability to the wider
population, the state can survive on rents captured from the oil industry.
This can create petro-states subject to corruption or allow states to maintain
patronage networks that undermine democratic accountability.9 It is
within this context that competition for the resources of the state has
been implicated in fuelling conflict. Work by econometricians implies
that dependence on primary commodities is a significant risk factor for
internal conflict.10 However, the precise causal relationship between oil
and conflict needs to be carefully teased out within its broader historical
and political context.
The articles by Leben Nelson Moro and Nils Duquet provide case studies
exploring the relationship between oil and conflict in Sudan and Angola,
respectively. Moros paper, based on extensive fieldwork in Sudan, argues
that oil exploration in Southern Sudan has been the major cause of
conflict between the government and the Sudanese Peoples Liberation
Army (spla) since the early 1980s. His detailed historical analysis highlights the complicity of government elites, the spla, international oil
companies, and the wider international community in the human rights
abuses and forced displacement that have taken place in the region.
Richard Barltrops response piece challenges Moros central argument as
mono-causal, arguing that the greed not grievance argument implicitly
made by Moro is overly reductionist. He argues that oil is but one
manifestation of wider grievance about political inequality within the
country. Furthermore, he questions whether oil has not, conversely,
played a positive role in motivating the peace process between 2002 and
2005. Meanwhile, Duquets piece highlights how the Movimento Popular
de Libertao de Angola (mpla) run state was able to maintain its
control of power with a narrow support base and fund both its civil war
and military interventions within the Democratic Republic of the Congo
through controlling oil revenues. Building a theoretical perspective,

Duquet argues that dependency theory, in conjunction with the paradox


of plenty theory can go some way towards improving our understanding
of the relationship between conflict and oil.

The Environment
Climate change has been widely accepted to have serious environmental
and social implications on a global scale. The threat of drought, rising
sea levels, crop failure, and species extinction, for example, have led
many governments to acknowledge the need for a reduction in fossil
fuel emissions, through a combination of greater energy efficiency and
investment in renewable energy sources. However, the global nature of
the causes and consequences of climate change requires that attempts to
resolve the problem are based upon international political cooperation.
The Kyoto Protocol has been the major instrument adopted to address
these concerns, aiming to cut greenhouse gas emissions from their 1990
levels to fixed targets between 2008 and 2012. However, the failure of
countries such as the us and Australia to sign the Protocol has limited its
scope and effectiveness; the disappointing rate of reduction in current
emissions levels has led to disillusionment with the Protocol.11
Joshua Busbys article draws upon public goods theory to argue that
the failure to move towards a post-oil economy is a form of collective
action failure. Reducing fossil fuel emissions is a global public good, he
claims, from which all states benefit irrespective of which country bears
the cost of reducing emissions. Yet, crucially, Busby argues that states
contributions to the reduction of fossil fuel emissions are not a pure public
good. Instead, states may have self-interested reasons to work independently to reduce emissions because of the commercial opportunities it
creates for companies based in those states. In particular, under the right
domestic and global institutional arrangements, companies (and hence
also states) may be able to profit from developing cleaner technologies.
He argues that global institutional arrangements should provide firms
with commercial incentives for technological innovation. The European
Union emission trading scheme, which allows firms to trade emission
allowances, accomplishes this as firms that reduce their emissions
can sell their allowances on the open market. Busby also argues that
promoting flexibility beyond the rigidity of the Kyoto Protocol can further
decrease the rate of greenhouse gas emissions. In particular, he claims,
institutional arrangements that, for example, guarantee intellectual
property rights can induce states to promote innovation and technology
transfer. He uses this argument to support consideration of alternatives to

Kyoto such as the u.s. governments proposed Asia-Pacific Partnership


on Clean Development and Climate (appcdc), which is based upon
flexibility and the promotion and transfer of clean technologies.

State-Business Relations
The oil sector represents a fascinating area for assessing the changing
nature of state-business relations. Companies such as Exxon Mobil wield
enormous political influence within states that require external investment in order to exploit reserves, and the long-term nature of contracts
give them a significant stake within the provision of public goods and
regulation within the state. Haliburton and TotalFina are amongst the
many private oil companies with close links to politics, which have been
widely documented. Furthermore, oil continues to be an industry in
which companies remain nationalised or have a strong parastatal character. Governments own some of the largest oil companies in the world, for
example: pdvsa, Saudi Aramco, and the Iranian National Oil Company.
This close relationship with the state makes oil a particularly political
industry. When national oil companies have transnational reach, their
state governments can use them as a vehicle for petronationalism. The
emergence of Sinopec and China National Petroleum Corporation
(cnpc) in China and Oil and Natural Gas Corporation (ongc) in India,
for example, have allowed those states to acquire stakes in oil reserves
abroad. Both cnpc and ongc have invested heavily in the Greater Nile
Consortium in Sudan.
One manifestation of the changing nature of state-business relations
in the oil economy is the leading role that some energy companies have
taken in investing in Corporate Social Responsibility (csr) activities,
such as social and environmental auditing and community development
projects. However, the profit motive has inevitably rendered csr a
rather ambiguous program. Barltrop touches upon the contradiction
of csr practices in Sudan, pointing to how oil companies perversely
used community projects to mitigate being implicated in human rights
violations. Peter Utting and Kate Ives article explores the motivation
and origins of csr in the oil industry in much more detail. Taking as its
starting point a Gramscian understanding of the hegemonic strategising of
companies seeking to co-opt civil society pressure groups, it argues for a
nuanced understanding of csr. In particular, it highlights the diversity of
responses of different companies within the oil industry and attempts
to explain this variation. It does so by exploring factors within the firm,

such as the mode of internalisation of csr within companies, and factors


external to the firm, such as the institutional and political context in
which the companies operate. In showing the significant role of the
institutional, political, and regulatory environment, the article highlights the possibility for society and politics to recapture the state from
strong business influence.

Conclusion
The papers are diverse and wide ranging, touching upon an array of
seemingly unrelated themes from very different theoretical perspectives.
Collectively, however, they highlight two things. Firstly, the range of
approaches taken in this issue to analyse the international politics of oil
highlights that the pursuit of sustainable and secure energy supplies is at
the heart of world politics, intersecting with just about every significant
contemporary global challenge. That a special edition on the international
politics of oil can cover so much ground is an indication of how wide
ranging the consequences of ongoing hydrocarbon dependence are
and the challenges this presents for humanity. Secondly, and perhaps
most significantly, it shows how much can be learnt about the changing
nature of politics through the study of oil. Because oil represents a crucible
for exploring the intersection of political economy, development, foreign
policy, and international cooperation, it offers a starting point for asking
more profound questions about the changing nature of contemporary
world politics and how it should be conceptualised by academia. In that
regard the papers in this special edition are as much about international
politics as they are about the international politics of oil.

Notes
1

Toby Shelley, Oil: Politics, Poverty and the Planet (London: Zed Books Ltd, 2005), 7.

Bilaal Abdullah, Peak Oil Paradigm Shift: The Urgent Need for a Sustainable Energy
Model (London: Medianet, 2005); and Kenneth S. Deffeyes, Beyond Oil: The View
from Hubberts Peak (New York: Hill and Wang, 2005), 3-12.
3

Paul Roberts, The End of Oil: On the Edge of a Perilous New World (New York:
Houghton Mifflin, 2004), 44-65.

4
5

Shelley, Oil, 83.

Jahangir Amuzegar, Managing the Oil Wealth: OPECs Windfalls and Pitfalls
(London: I.B. Tauris, 2001), 1-22.

10

6
Jeffrey Sachs and Andrew Warner, Natural Resource Abundance and Economic
Growth, NBER Working Paper, no. W5398 (1995).
7
Alan Gelb et al., Oil Windfalls: Blessing or Curse? (Washington DC: World Bank,
1988).
8
Christine Ebrahim-Zadeh, Dutch Disease: Too Much Wealth Managed Unwisely,
Finance and Development 40, no. 1 (2003): 50-51.
9
Michael Ross, Does Oil Hinder Democracy?, World Politics 53, no. 3 (2001):
325-361.
10

Paul Collier and Anke Hoeffler, On Economic Causes of Civil War, Oxford
Economic Papers 50, no. 4 (1998): 563-573; and Paul Collier and Anke Hoeffler,
Greed and Grievance in Civil Wars, Oxford Economic Papers 56, no. 4 (2004): 663695.
11
See, for example, Hans Joachim Schellnhuber et al, eds., Avoiding Dangerous
Climate Change (Cambridge: Cambridge University Press, 2006).